kcjenkins

Yes, if a client could pay it out in 12 months or less, I just advise them to make the first payment, which then generates a follow-up bill, which they then respond to with the next payment, which then generates a follow-up bill, which they then respond to with the next payment, etc.

Interesting. Thanks for that info. I think we are at the early stages of this, but I do believe it's going to be growing, as even the major countries play games with their currency. ITEX is not in every state, but where it is active, it does make sense. Guess we need to be aware of where it is, and be sure to ask the 'bartering question' to all our clients if in such an area.

It would be useful if anyone has actually had to use their E&O coverage, to hear how it went, and what they needed from you to deal with the claim?

The common picture of bitcoin users has been that they’re all long-haired anarchists, libertarians, and weirdos who would do away with government entirely, if they could. But in response to a question about his politics, Mike Caldwell had this to say: I am not an anarchist; I believe in the rule of law and a civilized society. But I also believe that unchecked power is a threat to the common good, and that anything that the public can do to challenge that power is a benefit to society. As an individual, if you accept bitcoin in exchange for your goods or your work, that is a vote for economic fairness. So is bitcoin going to save the global economy, or is it today’s answer to seventeenth-century tulip mania? Gavin Andresen offered a word of caution. I still tell people that Bitcoin is an experiment: only invest time or money you can afford to lose, because Bitcoin is still an experiment. The longer it keeps going in the face of volatility and technical glitches happening, the more we’ll know. But trust takes time.

Mt.Gox is the world's most established Bitcoin exchange. You can quickly and securely trade bitcoins with other people around the world with your local currency! https://www.mtgox.com/ Simple Bitcoin Converter updated constantly Prices are now (by default) gathered from multiple Bitcoin markets, and averaged by trade volume. http://preev.com/ The weakness in existing currencies stems from lack of faith in institutions—particularly central banks, which are often in league with commercial and investment banks. When a government bails out a failed bank or insurance company—in essence, by printing money—the net effect is that the currency as a whole is debased, in favor of a few and at the literal expense of everyone else, which amounts to a fair description of today’s global financial system. Hence the sudden appeal of bitcoins, which appear, for the moment, at least, to be immune to the machinations of inept or crooked bankers and politicians. In many ways, bitcoins function essentially like any other currency, and are accepted as payment by a growing number of merchants, both online and in the real world. But they are generated at a predetermined rate by an open-source computer program, which was set in motion in January of 2009. This program produced each one of the nearly eleven million bitcoins in circulation (with a total value just over a billion dollars at the current rate of exchange), and it runs on a massive peer-to-peer network of some twenty thousand independent nodes, which are generally very powerful (and expensive) G.P.U. or ASIC computer systems optimized to compete for new bitcoins. (Standards vary, but there seems to be a consensus forming around Bitcoin, capitalized, for the system, the software, and the network it runs on, and bitcoin, lowercase, for the currency itself.) Bitcoin releases a twenty-five-coin reward to the first node in the network that succeeds in solving a difficult mathematical problem requiring a certain amount of brute-force computation (known as a proof-of-work calculation.) The solution is then broadcast throughout the network, and competition for a new block and its twenty-five-coin reward begins. (There’s a good rundown of the technical aspects of Bitcoin on the Bitcoin wiki; there’s also a wonderfully pellucid explanation of the proof-of-work angle from Paul Bohm, on Quora.) At first, anyone armed with an ordinary computer could download and run the Bitcoin software and gather (or “mine”) bitcoins. The more computing power you can dedicate to Bitcoin calculations, though, the better your chances of arriving first at each solution. This feature of the system, by design, resulted in a kind of computational arms race that strengthened the network by rewarding increased computing power. Four years into the Bitcoin project, only very powerful, purpose-built machines have enough muscle to keep pace with existing network nodes. In this way, bitcoins are mined like gold used to be, in quantities that are small relative to the total supply, so that the supply grows slowly. There is an upper limit of twenty-one million new coins built into the software; the last one is projected to be mined in 2140. After that, it is presumed that there will be enough traffic to keep rewards flowing in the form of transaction fees rather than mining new coins. For now, the bitcoins are initially issued to the miners, but are distributed when miners buy things with them or sell them to non-miners (such as jumpy Spanish bank depositors) who desire an alternative currency. The chain of ownership of every bitcoin in circulation is verified and registered with a timestamp on all twenty thousand network nodes. This prevents double spending, since no coin can be exchanged without the authentication of some twenty thousand independent cyber-witnesses. In order to hack the network, you would have to deceive over half of these computers at the same time, a progressively more difficult task and, even today, a very formidable one. From the first, Bitcoin was devised as a system for removing the possibility of corruption from the issuance and exchange of currency. Or, to put it another way: rather than trusting in governments, central banks, or other third-party institutions to secure the value of the currency and guarantee transactions, Bitcoin would place its trust in mathematics. At the P2P Foundation, Nakamoto wrote a blog post describing the difference between bitcoin and fiat currency: [bitcoin is] completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust. The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts… With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless. Much of what has been written so far about bitcoins has centered on the perceived dangers of their relative anonymity, the irreversibility of transactions, and on the fact that they can be used for money laundering and for criminal dealings, such as buying drugs on the encrypted Web site Silk Road. This fearmongering is a red herring, and has so far prevented the rational evaluation of the potential benefits and shortcomings of crypto-currency. Cash is also anonymous; it is also used in money laundering and illegal transactions. Like bitcoins, stolen cash is difficult to recover, and a cash transaction can’t readily be traced back to the source. Nor is there immediate recourse for the reversal of transactions, as with credit-card chargebacks or bank refunds when one’s identity has been stolen. However, it is difficult to believe that anyone who has written critically of the dangers of bitcoin would prefer an economy where private cash transactions are illegal. The Bitcoin-software community is loosely governed not by wild-eyed kids camping out in half-deserted lofts but by what appears to be a rational and sober group of adult administrators who run the Bitcoin Foundation. This organization was modelled on the Linux Foundation, according to Gavin Andresen, who is currently the Bitcoin Foundation’s chief scientist. As the lead developer for the project, Andresen is paid a salary by the Bitcoin Foundation. He has been involved full-time in Bitcoin since the spring of 2011. Like the Linux Foundation, the Bitcoin Foundation is funded mainly through grants made by for-profit companies, such as the Mt. Gox exchange, Bitinstant, and CoinLab, who depend on the stability and continued maintenance of the underlying open-source code. “The Linux Foundation provides a bit of a center for Linux, and to pay the lead developer, Linus Torvalds, so that he can do nothing but concentrate on the kernel,” Andresen said. “It’s a tricky thing, once you get to be a certain size as an open-source project, how do you sustain yourself? Linux is the most successful open-source project in the world, so we thought it would make sense to use that as a model.” And the Financial Crimes Enforcement Network (FinCEN), the federal agency that enforces laws against money laundering, announced new guidelines requiring certain “virtual currency” trading entities to register as Money Services Businesses (M.S.B.s). Though the Bitcoin Foundation’s general counsel, Patrick Murck, was somewhat critical of the new guidelines, this move went a certain distance toward calming Bitcoin speculators and others who’d been worried that the government would take more drastic steps against the mining, transfer, and exchange of bitcoins. Gavin Andresen is among those who sees the new FinCEN guidelines as a positive development. In my opinion, the FinCEN guidance is fantastic news: it gives Bitcoin users and businesses clear rules on how they will or won’t be regulated. It is great for ordinary users, because FinCEN said that using bitcoins to buy products or services is perfectly legal. And, long-term, it is great for businesses, because they now know how FinCEN will classify them and what regulations they must obey here in the U.S. That said, it might cause problems for some smaller U.S. bitcoin-based businesses, who might have been hoping that they wouldn’t be regulated at all. The bigger bitcoin businesses have been anticipating this for a while, so I don’t think it will affect them.

Yes, it’s that magical time of year again when the Darwin Awards are bestowed, honoring the least evolved among us. Here Is The Glorious Winner: 1. When his .38 caliber revolver failed to fire at his intended victim during a hold-up in Long Beach, California would-be robber James Elliot did something that can only inspire wonder. He peered down the barrel and tried the trigger again. This time it worked. And Now, The Honorable Mentions: 2. The chef at a hotel in Switzerland lost a finger in a meat cutting machine and after a little shopping around, submitted a claim to his insurance company. The company expecting negligence sent out one of its men to have a look for himself. He tried the machine and he also lost a finger. The chef’s claim was approved. 3. A man who shoveled snow for an hour to clear a space for his car during a blizzard in Chicago returned with his vehicle to find a woman had taken the space. Understandably, he shot her. 4. After stopping for drinks at an illegal bar, a Zimbabwean bus driver found that the 20 mental patients he was supposed to be transporting from Harare to Bulawayo had escaped. Not wanting to admit his incompetence, the driver went to a nearby bus stop and offered everyone waiting there a free ride. He then delivered the passengers to the mental hospital, telling the staff that the patients were very excitable and prone to bizarre fantasies. The deception wasn’t discovered for 3 days. 5. An American teenager was in the hospital recovering from serious head wounds received from an oncoming train. When asked how he received the injuries, the lad told police that he was simply trying to see how close he could get his head to a moving train before he was hit. 6.. A man walked into a Louisiana Circle-K, put a $20 bill on the counter, and asked for change. When the clerk opened the cash drawer, the man pulled a gun and asked for all the cash in the register, which the clerk promptly provided. The man took the cash from the clerk and fled, leaving the $20 bill on the counter. The total amount of cash he got from the drawer… $15. [if someone points a gun at you and gives you money, is a crime committed?] 7. Seems an Arkansas guy wanted some beer pretty badly. He decided that he’d just throw a cinder block through a liquor store window, grab some booze, and run. So he lifted the cinder block and heaved it over his head at the window. The cinder block bounced back and hit the would-be thief on the head, knocking him unconscious. The liquor store window was made of Plexiglas. The whole event was caught on videotape. 8. As a female shopper exited a New York convenience store, a man grabbed her purse and ran. The clerk called 911 immediately, and the woman was able to give them a detailed description of the snatcher. Within minutes, the police apprehended the snatcher. They put him in the car and drove back to the store. The thief was then taken out of the car and told to stand there for a positive ID. To which he replied, “Yes, officer, that’s her. That’s the lady I stole the purse from.” Read the rest at My Underwood Typewriter

Despite a recent plunge, bitcoin has had a banner year. Now comes the hard part—figuring out the taxes on it. For the uninitiated, bitcoin is the most prominent of several "virtual currencies"—money that exists only online and isn't backed by any government. Released in 2009 by an unknown person or group going by the name Satoshi Nakamoto, bitcoin is maintained by a decentralized network of computers, called "miners," that process and verify transactions. As of Friday afternoon, the value of all bitcoins in circulation was nearly $8 billion, according to CoinDesk. This year the price of a bitcoin has risen from about $13.50 to about $650 on some exchanges, down from a November high of about $1,200 just before concerns arose that China will crack down on the virtual currency. Experts say, however, that there's no agreement on a host of fundamental questions for U.S. taxpayers holding or using virtual currencies. "People who invested in bitcoin or used it to buy goods or services this year have gains or losses, but no rules for reporting them," says Omri Marian, a professor of law at the University of Florida in Gainesville. "What should they do in April?" Among the pressing issues: When should bitcoin be considered a commodity, a currency or a capital asset for tax purposes? Are bitcoin transactions similar to barter? Is bitcoin subject to the same stringent tax rules as secret offshore accounts? And how will U.S. officials keep bitcoin, which is even more anonymous than cash, from being used to promote tax evasion or money laundering? So far, the Internal Revenue Service hasn't ruled on or addressed such issues directly. An agency spokesman released the following statement: "The IRS continues to study virtual currencies and intends to provide some guidance on the tax consequences" of transactions involving them. The agency is also "aware of the potential tax compliance risks posed by virtual currencies," he added. Meanwhile, bitcoin investors and users should be aware of some thorny basic issues. If bitcoin is a capital asset like a stock, says David Shapiro, a principal at PricewaterhouseCoopers in Washington, then long-term capital gains and losses—those on assets held for more than a year—would qualify for a top federal rate of about 24%. But losses above $3,000 could only be deducted against other capital gains. If, on the other hand, bitcoin counts as a currency (like euros or yen), then gains will be taxed at federal rates on ordinary income up to 43.4%, Mr. Shapiro says, and losses will be fully deductible against ordinary income like wages. In its preliminary filing, the Winklevoss Bitcoin Trust—a public fund registered by brothers Cameron and Tyler Winklevoss, of Facebook fame—said it intends to treat bitcoin as a capital asset instead of a currency, unless the IRS rules otherwise. Clearly, someone could have a taxable gain or loss in bitcoin when it is sold or given away. But there could also be a taxable gain or loss when bitcoin is used simply to purchase goods or services, says Mindi Lowy, a tax director at PricewaterhouseCoopers in New York. "The fact that using bitcoin to buy something could trigger taxes will come as a surprise to typical consumers," she says. Most people, after all, don't think of spending money as an act that could generate taxable gains or losses. Taxpayers may also have difficulty tracking a bitcoin's "cost basis," which is the price used as the starting point for measuring taxable gain or loss, says Ms. Lowy. Unlike with assets such as stock or mutual funds, there's no institution keeping bitcoin records, and taxpayers may not even know they need to do so themselves. Also up in the air: whether offshore-account reporting rules apply to bitcoin. Taxpayers with $10,000 or more in non-U.S.-based financial accounts often have to report the accounts to the U.S. even if they don't generate income, or else they risk severe penalties. A spokesman for FinCen, the U.S. Treasury Department unit charged with preventing financial crimes, says this question is "under consideration and will be made in consultation with the IRS," but it's unclear when. The IRS could face a bigger headache if bitcoin and its kin replace tax havens as the venue of choice for tax evaders, Mr. Marian says. "Virtual currencies possess the traditional benefits of tax havens: anonymity and no tax," he says. While rules now taking effect are putting pressure on governments and financial institutions to end offshore tax evasion, he adds, "virtual currencies pose a threat to this recent success because they don't depend on banks or governments." Mr. Marian says that he and many other specialists are "stumped" as to how the IRS will rule on bitcoin. He says his own sense is that it's a commodity similar to gold, because there's a finite supply and it's a store of value. He adds that some bitcoin transactions may be akin to barter—which has its own tricky tax rules. In the absence of guidance, advisers are telling clients that bitcoin income, gains and losses should be declared to the IRS. "If you take a reasonable position, they probably will accept it," says Jonathan Horn, a certified public accountant in New York. He plans to advise his clients to file foreign account disclosures if they meet certain thresholds and hold bitcoin through an entity that isn't located in the U.S. Taxpayers who have bitcoin and flout the tax rules, Mr. Horn warns, "are opening themselves to penalties, interest and possible fraud prosecution." —Email: [email protected]

Good to know it was not the ATX program that was the issue.

Good news, Tom. Now you get to deal with someone who actually has the ability to take the facts and make a reasonable decision.

I always keep the pdf version of Pub 17 on my desktop, It's easy to use the 'find' to search, and, as mentioned above, clients take a print-out of any IRS Pub as the gospel straight from on high.

I understand the reaction, Tabby, but this is not a "little thing". The penalties for not taking 'due care' are much higher than they used to be, plus more people are filing suit over this sort of thing. It used to be a 'little thing'. but it's really not any more. Be smart and CYA.

New taxes for 2014: What you should know Dan Caplinger, The Motley Fool Let's take a look at some potential new taxes in 2014 that you might have to pay if Congress doesn't take action in the next few weeks. Expiring provisions could add new taxes in 2014 The biggest challenge that taxpayers face is predicting whether lawmakers will extend expiring tax breaks. Every year, lawmakers seem to go down to the wire with key tax-extender legislation, and it's never certain whether certain popular provisions will get the go-ahead to remain in effect for the following year. If these provisions expire, they'll create new taxes in 2014 for individual and business taxpayers to pay. For individuals, new taxes could come from a variety of sources: For years, homeowners who've had part of their mortgage debt forgiven haven't had to treat the resulting debt reduction as taxable income. That could change for 2014, and it comes at a tough time for some homeowners. Bank of America (ticker: BAC) , JPMorgan Chase (JPM ) and other banks have continued to modify loans as part of settlements with regulators and state attorneys general, producing debt forgiveness income. Yet with the perception that the housing market has recovered, lawmakers might choose not to extend the provision. Public-transit commuters could see a new tax if a provision equalizing the amount they're entitled to receive tax-free from their employers to subsidize their commuting expenses expires. Without an extension, the amount could drop from an expected $250 per month to $130 per month. Those who drive to work and use parking will continue to get the higher amount, raising debate about tax policy. The loss of other deductions and credits could boost taxes, including the energy-efficiency credits for certain home-related expenses, tuition deductions for higher education, and itemized deductions for sales taxes. Meanwhile, for businesses, the potential losses could be even bigger. The most substantial new taxes in 2014 for businesses would come from the expiration of the 50% bonus depreciation provision, which allowed half of the cost of purchases to be deducted from current-year income rather than having to be spread out over the usable lifetime of the purchase. A provision aimed at small businesses that allows them to elect to deduct all of the cost of certain types of property has gotten more attention on political grounds. But bonus depreciation affects businesses of all size, and many credit the provision for helping General Electric (NYSE: GE ) and other big corporations greatly reduce their tax bills in recent years. Some provisions affect specific industries. Credits for biodiesel production are slated to expire, as are benefits for railroad-track maintenance, motorsports complexes, and racehorse owners. These narrowly defined provisions are often relatively small in dollar terms, but they can have a big impact on those who are in the businesses that they affect. What's next? As of mid-December, lawmakers hadn't taken much action to push these provisions forward. That doesn't mean it won't happen, though, as many individuals and businesses rely on the provisions. In particular, targeted business tax breaks often make or break a certain industry's business model, and players in those industries use all their political clout to try to get them extended. Nevertheless, given the lack of attention the situation has gotten so far, it's entirely possible that expiring provisions will in fact results in new taxes for 2014 and beyond.

THIS ONE IS HILARIOUS

Sure, find 122133, notify 5000, that should fix it. 4% should be enough, right?

LOL

Probably.

Jainen's point is the only worry I would have, Tom. I've been in a position one time fairly similar to yours, where at the appeal level they tried to say that I could not move forward because I had not used all the options available to me before Appeals. Thankfully, I was able to prove that I had, but it is something that they [appeals] can and sometimes do use against you. So do respond in writing, even tho you hope she does kick it to appeals.

I agree with that. But it seems to be hard for government to do anything the simple direct way.

Exactly. The thing it is easy for some people to forget is that doctors who operate a private practice are running a business, and like all small businesses, they have overhead to be concerned about. The new law significantly increases their overhead. If their income is being reduced at the same time, by the government switching many people from other plans into Medicaid, and at the same time reducing Medicare reimbursements, they of course are going to have to take that into consideration.

Medicare and Medicaid are two different programs, and Medicare pays more than Medicaid, for the same treatments. So your example does not disprove my point, at all.

Last tax season marked an increasing level of noncompliance by tax preparers with the Internal Revenue Service’s due diligence reporting requirements for the Earned Income Tax Credit, according to a new report reviewing the IRS’s performance during the delayed tax season. The report , from the Treasury Inspector General for Tax Administration, found that as of March 2, 2013, TIGTA had identified 122,133 paid tax return preparers filing 708,298 tax returns claiming $2 billion in EITC without the required Form 8867 attached to the tax return. This equates to more than $354 million in penalties that can potentially be assessed by the IRS. In addition, TIGTA’s report raised concerns about the potential misuse of the split refund option to direct multiple tax refunds to the same bank account. TIGTA notified the IRS in February that some tax refunds were apparently directed incorrectly to tax preparers’ accounts. As of May 2, 2013, taxpayers filed 385,591 tax returns with a Form 8888, Allocation of Refund (Including Savings Bond Purchases), requesting multiple direct deposits to the same bank account. Direct deposits totaling more than $150.8 million were made to 46,897 bank accounts. Each of the 46,897 bank accounts identified by TIGTA had three or more Form 8888 deposits from different taxpayers into these accounts. TIGTA determined that 248,027 (64 percent) of the 385,591 tax returns were prepared by a paid tax preparer. The IRS reported that it identified 579,183 tax returns with $3.6 billion claimed in fraudulent refunds during tax return processing and prevented the issuance of $3.47 billion (96.4 percent) of those refunds. “The IRS is continuing to expand its efforts to identify and prevent fraudulent tax returns from being processed,” Treasury Inspector General J. Russell George said in a statement Wednesday. IRS Response Peggy Bogadi, commissioner of the IRS’s Wage and Investment Division, pointed out in response to the TIGTA report that the IRS has expanded its efforts to reduce the payment of erroneous claims for the Earned Income Tax Credit. “Final regulations addressing the requirement for paid tax return preparers to include Form 8867, Paid Preparer's Earned Income Credit Checklist, with returns claiming EITC, were issued in late December 2011,” she wrote. “The IRS quickly expanded its outreach program to educate the practitioner community. The outreach activities included specifically notifying 5,000 EITC preparers who had not included Form 8867 with the tax year 2011 returns they prepared. We also worked with the software development community to ensure the Form 8867 was available for tax year 2012 return preparation software products. Despite these efforts, systemic issues were discovered that caused Form 8867 to appear incomplete or missing from some software products. We worked with the software vendors to resolve the problem; however, the data set for those tax year 2012 returns whose paid preparers may be subject to the due diligence penalty does not have an accuracy level sufficient for the IRS to assert the penalty without additional analysis.” The IRS’s own in-process review of tax returns that met its penalty criteria found that 65,749 returns, prepared by 2,474 paid return preparers, claiming $151.6 million worth of Earned Income Tax Credits, had no Form 8867 attached to the return, Bogadi noted. “This is significantly less than the 158,348 returns, prepared by 52,826 preparers, claiming $362 million of EITC, as reported by the Treasury Inspector General for Tax Administration,” she added. “Consequently, we do not agree with the associated outcome measure of $354 million, as it is overstated. When our analysis is completed, we will pursue penalty assertion for those previously noncompliant return preparers who were notified of the due diligence requirements. With the resolution of technical issues affecting the penalty administration, we are prepared to fully enforce the due diligence provisions in the upcoming 2014 filing season.” In addition, TIGTA identified 42,961 questionable education tax credits totaling $58.5 million and $2.6 million in questionable Plug-in Electronic Drive Motor Vehicle Credits issued by the IRS as of May 2. However, Bogadi differed with TIGTA’s assessment of the level of dubious education tax credits. “We also disagree with the $37.7 million outcome measure associated with the American Opportunity Tax Credit and the $20.7 million outcome measure associated with the Lifetime Learning Credit claimed for tax year 2012 by students who are of an age at which they are unlikely to be enrolled in a four-year college or vocational program,” she wrote. “The law providing the education credits and defining student eligibility does not establish minimum ages, maximum ages, or likely ages at which students may qualify for the credits. While student age is one attribute to be considered when evaluating the potential for an erroneous or fraudulent claim, it cannot be the sole determinant. Establishing a likely age for pursuing post-secondary education is subjective. The IRS does consider the age of students, along with other criteria, as part of a comprehensive screening process to evaluate the fraud potential of the entire return and to stop those refunds from being issued when additional scrutiny is deemed necessary. The student age is also considered in a post-processing environment when returns are scored for audit potential. The macro-level data analysis performed by the TIGTA did not take the next step of contacting taxpayers to ascertain facts and circumstances, and determine whether their credit claims were legitimate or not.”

I can not blame the doctors, they can't operate their offices if the payments are less than their costs for the service. The new laws have already driven many doctors to either become employees of hospitals, etc, or retire, simply because of the cost of new equipment needed to comply with the requirements for computerized records. It's going to continue to reduce the number of doctors in rural locations, for sure.

If the persons who provided the wrong info do not agree to correct it, you file the 1040X and use the 'explanation' section to object, with whatever information you have, attach any proof you have, and wait for a followup letter.

Oh,my, I LOVE THAT What a wonderful idea!